tag:blogger.com,1999:blog-19107184064251603262024-03-19T00:38:49.410-07:00Finance For youAll about Finance and AccountingUnknownnoreply@blogger.comBlogger30125tag:blogger.com,1999:blog-1910718406425160326.post-8794526976949697722011-08-11T07:12:00.000-07:002011-08-11T07:12:47.125-07:00How Income Tax Audits WorkYou get a letter in the mail, a letter emblazoned with the gut-wrenching acronym, IRS. You say to yourself: "But I filed on time! I paid all my taxes!" That may be, but unfortunately, that doesn't mean you won't be audited.<br />
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Yes, it’s nerve-wracking. But income tax audits, like death and taxes themselves, are a fact of life in the United States. The Internal Revenue Service examined close to 1.4 million individual tax returns in 2007, about 1 percent of all individual tax returns [source: CNN]. Compare this to 1.29 million returns examined in 2006, and you see that the IRS is becoming increasingly serious about getting its money [source: Kristof].<br />
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An audit is frightening no matter what, but it doesn't have to be inscrutable. And it doesn’t always mean you will owe more money. There is, believe it or not, a method to the madness.<br />
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An income tax audit is an examination of a tax return. During an audit, an IRS examiner makes a line-by-line assessment of your tax return. If something doesn't add up correctly or the return contains something unusual, the examiner will point out the mistake or ask you to justify the unusual item. Depending on what the examiner finds, you may owe more tax, or you may be in the clear.<br />
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This article takes a look at the different types of audits -- office, field and correspondence. You’ll learn what to do if you get the dreaded audit notice. Finally, you’ll learn about the red flags that could attract the IRS examiners, and get some tips on how you can avoid investigation.<br />
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<b>Preparing for Income Tax Audits </b><br />
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How do you prepare for an income tax audit? It depends on the type: correspondence, field or office.<br />
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Correspondence Audit<br />
If the IRS examines one of your returns, the examination will likely take place via mail. The IRS uses correspondence audits to take care of the most common tax return problems, such as missing forms and schedules, illegible entries and mathematical errors.<br />
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Your first step is to return the audit notice along with any documentation and explanations the IRS has requested. Such documentation might include:<br />
- home mortgage statements<br />
- tax returns<br />
- receipts<br />
- brokerage statements<br />
- retirement account records<br />
- pay stubs<br />
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For example, if the IRS questions whether your business meal deductions are valid, you would include receipts from those meals, as well as any proof that these meals were, indeed, business related.<br />
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Field Audit <br />
In a field audit, the examiner visits your home or business to verify the information on your tax return. For example, if you write off a massive amount of printer ink, a field examiner might want to know why you go through so much ink.<br />
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Office Audit <br />
In an office audit, you go to an examiner's office. The examiner requires you or your representative -- such as your tax preparer or lawyer -- to bring documentation and information such as receipts, account statements or pay stubs.<br />
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At the end of the audit, the examiner will mail you or give you a 30-day letter. This letter consists of a copy of the examination report, an explanation of how the IRS wants to change your tax return to reflect the report's findings, an explanation of your right to appeal and a handy publication called "Your Appeal Rights and How To Prepare a Protest If You Don't Agree."<br />
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You have 30 days to respond, so if you're not sure about the IRS's findings and you want to consult a tax professional, don't rush to sign the examination report. If, within 30 days, you find the IRS is correct, indicate you agree and sign the examination report.<br />
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If you do not agree, however, you can appeal the findings before the 30 days is up. An appeal, handled by an IRS Appeals Officer, can take a year or longer.<br />
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Following the appeal, the IRS sends a 90-day letter, which gives you -- you guessed it -- 90 days to request an escalation to Tax Court, in case you don't agree with the Appeals Officer's findings. Most audits are resolved long before Tax Court comes into the picture.<br />
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But before you appeal the findings, it would be in your best interest to ensure that you are 100 percent right, because interest accrues on any unpaid tax from the day you file your return, not the date of your audit. For example, if the IRS audits you for a return you filed two years ago, and it turns out you are in the wrong, you owe the unpaid tax plus interest that has accrued over that two years plus late-payment penalties. As you might imagine, these combined factors can make for a nasty bill.<br />
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<b>Avoiding Income Tax Audits</b><br />
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discrepancies. Based on a closely guarded formula, the system assigns each return a score that determines whether or not the IRS will audit you.<br />
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Here are some common red flags:<br />
- significant income increase or decrease<br />
- significant deduction-to-income ratio -- say, $80,000 in deductions on a $100,000 income<br />
- business deductions consisting of fancy dinners and pricy trips to the Moulin Rouge<br />
- home-office deductions<br />
- low tip income for workers who traditionally make a lot of money from tips<br />
- income exceeding significant benchmarks, such as $100,000 and $1,000,000<br />
- self-employment<br />
- computational mistakes and typos<br />
- incorrect Social Security number<br />
- incorrect reporting of income, deductions, et cetera.<br />
- late filing without applying for an extension with Form 4868<br />
- not paying your full tax liability without applying for an installment agreement with Form 9465<br />
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Obviously you can't avoid an income change if you get a better-paying job. And if you're self-employed, you're self-employed. But you can still do some things to decrease the likelihood you will be targeted for examination:<br />
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Keep Good Records: Three years is the statute of limitations on auditing returns that were filed on time. So, theoretically, the IRS could audit you for a return you filed three years ago. If you keep good records, you'll be able to answer any inquiries the IRS might have.<br />
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Explain Yourself: If your trip to the bowling alley is a justifiable business expense, include the receipts, a written explanation and any other appropriate documentation with your return. If you think the IRS might be curious, take care of it before they have a chance to ask you about it.<br />
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Just Because You Spent Money Doesn't Mean It's a Deduction: Don't go overboard with your deductions, especially if you're self-employed. Also, don't estimate your deductions -- use exact amounts based on receipts.<br />
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Beware of Tax Software: Tax software is great for returns at the simpler end of the spectrum. When you start getting into deductions and complex sources of income, consider verifying the accuracy of your return with a tax professional.<br />
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Compare: Compare your tax liability to the national average for your occupation. If there's a big difference between your tax liability and the rest of the country's, take another look at your return.<br />
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Be Tidy: A sloppy return is sure to get a thorough check by the IRS, especially if the all-important numbers are illegible.<br />
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Check and Recheck Your Return: Nip mathematical errors in the bud before you file.<br />
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There's no sure way to avoid an income tax audit. In fact, every year the IRS conducts a number of random audits to serve as benchmarks for its examinations. The best things you can do are file on time and pay what you owe. When it comes down to it, punctuality and accuracy are the only things the IRS really wants.<b> </b>Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1910718406425160326.post-49568240044671273192011-08-09T06:27:00.000-07:002011-08-09T06:28:17.462-07:00How Inheritance Tax WorksBenjamin Franklin once wrote, "In this world nothing can be said to be certain, except death and taxes." It's an old, sardonic aphorism that nevertheless is universally true. One delightful area of tax law manages to combine both death and taxes into a single experience: inheritance tax.<br />
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In fact, what happens to your money when you die seems to be the source of quite a few old saws: "They get you coming and going," and "You can't take it with you," among others. What it all boils down to is pretty straightforward: When you die, you leave your money, your home, your possessions and other things of material value behind. You'll pass them down to your children, to other family members or friends, or to charity. And one way or another, the government will take its share.<br />
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In practice, of course, nothing is as simple as that. The property of the deceased might be subject to inheritance tax, estate tax, state and federal tax statutes, and a host of exemptions that can put more money in the pockets of the heirs. Because inheritance and estate taxes (sometimes known as "death taxes") are generally seen as a tax on the rich, these tax laws also get batted around as political footballs from time to time. In fact, President Obama signed a law changing federal estate taxes in 2010, and there are likely more changes to come.<br />
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If you're interested in planning ahead for that inevitable day when you or a loved one passes away, you've come to the right place. In this article, we'll explain the difference between inheritance and estate tax, how to avoid as much of those taxes as legally possible, and what the actual rates are for those taxes.<br />
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<b>Differences Between Estate Taxes and Inheritance Taxes</b><br />
Before we start, let's clear up some confusion about terminology. While "estate tax" and "inheritance tax" are distinct terms with separate legal meanings, those meanings differ from country to country. Sometimes, the terms are used interchangeably. You might also hear a pundit of commentator on TV talking about a "death tax." That term can refer to either estate or inheritance tax, depending on the situation. The definitions in this article are generally accurate in the U.S. and in international law, although even some U.S. states muddle the terms.<br />
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Let's start with estate tax. Your estate is the total of your possessions and debts left behind when you die. An executor, either named in the will or appointed by law, is placed in charge of the estate and must pay off outstanding debts, liquidating property to do so if necessary. Funeral expenses and administrative costs (that is, payment to the executor for dealing with all of this) are taken out next. Whatever is left over is what can be passed on, but before that happens, the federal government takes its share. In 2010, the maximum rate was 35 percent; a few states levy an estate tax as well. So, the estate tax is a tax on the total amount of the estate, after creditors are paid but before any heirs get their bequest. The tax is paid by the estate itself.<br />
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Inheritance tax occurs after the heirs have received their payouts from rich Uncle Thaddeus. It is a tax on the amount received and is paid by the heir. Inheritance taxes are levied by the states. This means that in many cases an estate is taxed twice -- first by the federal estate tax, then by the state inheritance tax.<br />
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What exactly counts toward the estate, anyway? Is it just the money stashed under the bed? The bank account? The summer home in the Maldives? An estate is all of those things, and more: Cash, accounts, real estate, stocks and bonds and other business interests, and valuable goods like cars, boats, art pieces or rare collections. An appraiser will determine the fair market value of everything to figure out the taxable value of the estate.<br />
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<b>Inheritance Tax Exemptions</b><br />
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There are quite a few ways to avoid or reduce inheritance and estate taxes. Some of them involve very complicated financial structures and maneuvers. If you're the type of person who has tens or hundreds of millions of dollars of estate value to worry about, you're going to hire a skilled estate planner to deal with these things. Basically, an estate planner will work with the family and utilize trusts, charitable donations, non-taxable gifts and other techniques to meet the family's needs and minimize the tax burden.<br />
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For smaller estates, exemptions fall into two main categories: exemptions due to the heir's relationship with the deceased and amount-based exemptions. In either case, the exemptions are applied to the taxable amount before the government's percentage comes out. That means that an estate tax can use each exemption just once (because it's only taxed once), while exemptions to inheritance taxes are applied separately to each heir, and can differ from heir to heir.<br />
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The most common relationship-based exemption is when the estate is passed from the deceased person to a spouse. In that case, there is an unlimited exemption -- no matter the value of the estate, it will not be subject to federal estate tax if it's passed to a spouse. States who levy an estate tax follow the federal government's rules for this as well. If the estate is passed to children, siblings or golfing buddies, the exemption doesn't apply.<br />
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Amount-based exemptions are where things get sticky. For federal estate taxes, the current limit (as of 2011) is $5 million for an individual, $10 million for a couple. If the estate is worth that much or less, no estate tax is levied. This is why estate planners work so hard to move money around -- if they shrink it down to $5 million or less, the estate is tax free. This is also why estate taxes are considered a tax on the rich, because really, how many of us are losing sleep over what happens to someone's $20 million estate?<br />
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State inheritance taxes make things more complicated. Each state uses different thresholds (if it has inheritance taxes at all). There might be exemptions for some family members, but not others, or different tax rates depending on whether you're a spouse, a child or just a friend. Many states tie their inheritance tax directly to the federal estate tax and exemption rate. Some have much lower thresholds than the federal threshold. In Illinois, for example, the threshold is only $2 million, while in Hawaii it's $3.5 million (as of 2011) [source: McGuireWoods].<br />
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There are a few other miscellaneous deductions, usually deducted from the estate's value before taxation. If a property is mortgaged, the amount of the mortgage is deductable. Also, family business and farms may be taxed at a reduced rate. This allows families to pass business down to the children without the business going bankrupt.<b> </b><br />
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<b>Inheritance Tax Rates</b><br />
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Exact inheritance tax rates vary from state to state, but inheritance taxes tend to be set up on a progressive scale. The general rule: The more valuable the estate, the higher the tax rate.<br />
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How do you know what your inheritance tax rate will be? The tax bracket for your inheritance depends on your relationship to the deceased. Remember, surviving spouses are completely exempt from inheritance tax. Also, keep in mind that state tax laws do change, so the specific numbers in the following examples may shift over the years.<br />
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Pennsylvania has the following basic tax rates:<br />
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4.5 percent for lineal descendants<br />
12 percent for siblings<br />
15 percent for anyone else [source: Elder Law Firm of Robert Clofine]<br />
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For another example, let's take a look at Indiana's inheritance tax system. Indiana divides heirs into three classes. Each class has a different tax rate schedule and exemption.<br />
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Class A ($100,000 exemption): direct ancestor or descendant, stepchild, direct descendant of stepchild (stepchild doesn't need to be adopted)<br />
Class B ($500 exemption): sibling (brother or sister), descendant of sibling, spouse, widow or widower of your child<br />
Class C ($100 exemption): anyone else, besides your spouse [source: Indiana Department of Revenue]<br />
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Let's imagine a fictional family -- Mr. Smith is a widower with two children, Belinda and Timothy. Mr. Smith's children would be Class A heirs. Let's say they each inherit $450,000 in cash. Because they are Class A heirs, each can claim a $100,000 exemption, reducing their taxable inheritance to $350,000 apiece. Now, let's see what their tax rate will be.<br />
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Inheritance of $25,000 or less: 1 percent of net taxable value<br />
Over $25,000 but not over $50,000: $250, plus 2 percent of net taxable value over $25,000<br />
Over $50,000 but not over $200,000: $750, plus 3 percent of net taxable value over $50,000<br />
Over $200,000 but not over $300,000: $5,250, plus 4 percent of net taxable value over $200,000<br />
Over $300,000 but not over $500,000: $9,250, plus 5 percent of net taxable value over $300,000 [source: Indiana Department of Revenue]<br />
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Belinda and Timothy are in the fifth marginal tax rate for the Indiana inheritance tax. This means that their first $25,000 will be taxed at 1 percent; their second $25,000 ($25,001 to $50,000) will be taxed at 2 percent; and so on. When their income reaches the fifth bracket, they have a remaining $49,999 that will be taxed at the 5 percent rate. The calculation will look like this:<br />
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$49,999 x 0.05 = $2,499<br />
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To find their total tax, add the tax from the fifth bracket to the tax accumulated in the lower tax brackets.<br />
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$2,499 + $9,250 = $11,749.95<br />
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So, Timothy and Belinda each owe $11,749.95 in inheritance tax. Since Departments of Revenue prefer to round their figures, Timothy and Belinda will pay $11,750 each.<br />
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Federal estate tax law has undergone some big changes in recent years. In 2010, there was no federal estate tax. However, inheritances were taxed as capital gains, the same as profits from stocks, bonds and real estate. But at the end of 2010, President Obama signed the December 2010 Tax Relief Act. It re-established the federal estate tax at a rate of 35 percent, but with the $5 million exemption. That exemption, by the way, means that only 0.5 percent of all estates in the U.S. will pay any estate taxes at all [source: Randolph]. Those tax rates and exemption thresholds expire at the end of 2012, when Congress will decide on a new rate.<b> </b>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-41504942473504476642011-08-09T05:01:00.001-07:002011-08-09T05:02:15.817-07:00Stick With U.S. Stocks After S&P Cut, Barclays’s Olsen SaysU.S. stocks are attractive, even after Standard & Poor’s stripped the world’s largest economy of its top credit rating for the first time, because the companies are inexpensive and have global reach, Barclays Plc (BARC) said. <br />
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“Don’t join the crowd and try to pile out,” Hans Olsen, head of Americas investment strategy at Barclays Wealth, said in a telephone interview yesterday. The unit of the London-based bank oversees 170 billion pounds ($279 billion). “Valuations and earnings power are still there, that’s for sure, and those who can should hold with their equity positions,” he said.<br />
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S&P cut the nation’s AAA credit rating for the first time, criticizing lawmakers for failing to reduce spending or raise revenue enough to reduce record budget deficits. The S&P 500 Index (SPX) fell 2.3 percent to 1,172.19 as of 10 a.m. in New York, following a two-week rout that dragged the benchmark gauge down 11 percent and erased its 2011 gain. <br />
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U.S. stocks won’t be impaired by the cut because companies can expand their profit margins as they access global markets even as the economy slows, the New York-based strategist said. Investors aren’t likely to abandon the country’s equity market because stocks are inexpensive using price-earnings ratios. <br />
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“American companies have earnings power because they have depth and reach of where their products are sold and they have margins because they’ve been absolutely laser-like in their focus on margins,” he said. “Those revenues translate into earnings, and the price that you pay for those revenues and earnings is on the lower end of what it’s been over 10 years.” <br />
Cheaper Stocks <br />
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The S&P 500’s valuation has dropped to 13.1 times profits in the last year, the lowest level since the month the bull market began in 2009, according to data compiled by Bloomberg. Concern about weakening economic data has overshadowed an earnings season that has seen per-share profits grow 18 percent and sales increase 13 percent at companies in the measure that reported second-quarter results since July 11. <br />
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“Longer term, the global economy is still growing, albeit slowly,” Olsen said. “This probably will cause companies to be even more ruthless in their cost-cutting to protect profit margins -- and as a result, one could remain constructive on profitability.” <br />
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Barclays is reaffirming its “overweight” rating on developed-market equities “for sure,” said Olsen, who was hired from JPMorgan Chase & Co. last month as the top Americas strategist, a new position managing a team of strategists for the region. Olsen oversees the creation of investment strategies for wealthy clients in the Americas and reports to Aaron Gurwitz, the chief investment officer for Barclays Wealth. <br />
‘Stay In The Ring’ <br />
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“They’re cheap and they’re supported by their earnings,” Olsen said. “Even if the earnings were to get a bit of a haircut, these valuations still support those earnings.” <br />
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Barclays is reaffirming its recommendations, although the rating cut will boost stock-market volatility, he said. Investors have had “a dreadful two weeks” and some investors who have “bad-news fatigue” have decided to sell stocks because they want to wait until markets calm before investing again. <br />
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“Short-term, it’s going to be like being a boxer in the ring: You’ll be jabbed and crossed by this information,” he said. “The key will be to just stay in the ring.”Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-57724277308845475422011-08-05T11:05:00.000-07:002011-08-05T11:05:22.886-07:00How to Avoid Tax Problems?Tax problems can certainly intimidate everyone. To avoid summon from the IRS, you must learn the basics about taxes and its corresponding law. Likewise, knowledge of preventive means can spare you from the nightmares accompanied by tax problems.<br />
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Understanding the Real Essence of Taxes<br />
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While most of us complain about the tax deductions on our income, why not instead look into the reasons beyond the cut? Perhaps understanding the real essence of taxes will ease our revolutionary minds and shirk tax problems. We pay taxes because we care. Look around, everything that you see in public is harvests of your monetary contribution. In the first place you are secured within your land because you pay for the services of the policemen, firefighters, etc. Appreciating all the things around you may inspire you to become a responsible citizen by paying taxes.<br />
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Organizing IRS Records<br />
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Documents and receipts are very essential when dealing with IRS problems. It would be very helpful to keep all the necessary documents organized. Filing all your financial statements will spare you from future hassle when IRS problems occur.<br />
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Never Procrastinate<br />
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Avoid delaying of IRS preparation. Panic will only cause you tax problems with the IRS. You may tend to overlook potential documents and sources of tax declaration. Therefore rushing to beat the deadline will put you at risk of facing improbable errors. While you can request for an extension to file, it is still advisable to pay on time so as not to accumulate penalties.<br />
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Honesty is the Best Policy<br />
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When it comes to money matters honesty shall prevail. Tax evasion is common yet it is an illegal strategy to avoid huge financial deduction from taxpayers' accounts. Because of the advances in technology, the IRS can determine any financial discrepancy filed as tax return. The IRS screens accuracy through different computer systems hence there is no way to trick the IRS collectors.<br />
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Use a Tax Software Program<br />
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The common reason of unintentional tax problems is the inaccuracy of declared financial statements. A tax software program will ensure truthful calculation. In addition, when you hire a specialist, it is very likely that he/she will make use of the tax software program as well.<br />
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E-file Your Tax Return<br />
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Electronic filing of you return ensures you of quick and efficient mode of payment. Your payment will be instantly acknowledged by the IRS. Do not ever attempt to snail mail your return during the last minute of filing. You should consider the importance of IRS confirmation of your tax return otherwise you'll end up facing tax problems.<br />
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Avoid Rounding Off Numbers<br />
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How unlikely it is to file a tax return with exact amount as $10,000 or $20,000. Avoid rounding off figures for it will only invite you to face tax problems. Don't raise your own flag for an IRS audit.<br />
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Hire a IRS Lawyer<br />
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Mistakes on declaration are common because of the mounting complexities of taxes. If you doubt your expertise on managing your own finances it is highly recommended to hire a personal lawyer. The services of a attorney can save you from falling into the trap of the IRS. Preventing tax problems always better than dealing with tax problems, isn't it?<br />
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The tips enumerated above will help you prevent unnecessary tax problems with the IRS. Accuracy, honesty and expertise are the three common factors to avoid the daunting process of absolving IRS legal issues.<br />
Source : <a href="http://ezinearticles.com/?How-to-Avoid-Tax-Problems?-Find-Out!&id=6471276">http://ezinearticles.com/?How-to-Avoid-Tax-Problems?-Find-Out!&id=6471276</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-65448512214568486422011-08-05T11:02:00.000-07:002011-08-05T11:03:23.553-07:00Certified Tax ServicesFinancial planning is a common term heard in the business field nowadays. This applies to much more than money. Setting a goal and a financial plan is the best way to keep your wealth steady and stable. Without a clear goal and a plan to attain it, you're going to drift around pointlessly. If you really want to break out of your bad financial habits you certainly need to set a concrete goal and get on a plan to reach that goal.<br />
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A financial planner or personal financial planner is a practicing professional who helps people deal with a variety of personal monetary issues through appropriate planning. When considering a financial planner, you must ensure that he is a certified financial planner. Controlling your day-to-day financial dealings is the first step in personal financial planning is so that you can do the things that bring you satisfaction and help you arrive at your goals. By planning and following a budget, this can be achieved. A detailed study is needed to set a plan. Proper planning is needed on the following areas such as cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning (for business owners).<br />
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A financial plan, in general usage can be said as a budget or a plan for spending and saving future income. This plan has to assign future income to a variety of expenses, such as rent or utilities, and also has to set aside some income for short-term and long-term savings. Choosing and following a path towards long-term financial goals is the second step in personal financial planning. In order to determine your financial achievement, you need to have goals so that you can measure your success. A financial plan can also be an investment plan, which allocates savings to a variety of assets or projects predictable to produce future income, such as a new business or product line, real estate, or shares in an existing business. Saving money, controlling the level of spending and investing for the future are all important aspects of financial planning. But if you don't have specific goals, then you wont be having a vision for what you're trying to reach. Identifying and recording your goals, assigning them into long-term and short- term basis, evaluating your progress are some easy steps for setting financial goals.<br />
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Submission of tax returns is a must for all business, so tax preparation is a must. Preparing your own business tax return can be a frustrating experience if you don't have all the necessary information at your fingertips. The taxpayer can do tax preparation with or without the aid of tax preparation software and online services. Usually most of the businessmen use a licensed professional for the purpose of tax preparation. Since the income tax laws are considered to be complicated, many taxpayers seek outside assistance. Gathering certain documents before you begin will help you fend off the frustration of tax preparation. Filing all business and personal tax returns also has some cost.<br />
Source :<a href="http://ezinearticles.com/?Certified-Tax-Services&id=6456736"> http://ezinearticles.com/?Certified-Tax-Services&id=6456736 </a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-4108139626798426802011-07-26T00:38:00.000-07:002011-07-26T00:38:56.937-07:00Start-Ups and SpousesWhen a married person embarks on an entrepreneurial endeavor, it's often the other spouse who's left holding up the family's finances.<br />
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Take Kim and Ryan Woodings. After two years of marriage, the young couple from Boise, Idaho, were relatively prosperous. But things changed in June 2005 when they invested half their savings in MetaGeek LLC, a company started by Mr. Woodings.<br />
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The Woodingses shelled out $12,000 in hopes of selling by year end 240 Wi-Spys, a hardware and software combo Mr. Woodings developed to help users detect radio waves that interfere with the performance of their computers. But demand was greater than expected. So Mr. Woodings, 31 years old, quit his job as a systems engineer less than a year later to devote himself to MetaGeek full time.<br />
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That left Ms. Woodings, 26, an assistant registrar at Boise State University, as the family's sole breadwinner. Her take-home pay was less than half the couple's earlier combined income and just barely covered monthly bills.<br />
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"When he said he wanted to quit his job and go full time on the business, that's when I got nervous," says Ms. Woodings. "I knew we would have to make big lifestyle changes to live on my salary."<br />
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The couple cut back on luxuries and set a deadline for Mr. Woodings to pull the plug and look for permanent employment if the business didn't work out. Luckily, sales of Wi-Spys have soared, allowing Mr. Woodings to hire staff and draw out lump sums of cash when necessary for family expenses.<br />
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Besides guts and determination, more often than not, it takes the income of a working spouse like Ms. Woodings to help start a business. Of self-employed U.S. workers in 2005, 71% were married, according to the Small Business Administration's Office of Advocacy.<br />
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But shifting from two paychecks to one isn't easy for two-income couples. Often, financial difficulties -- or the fear of them -- can cause tension.<br />
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"Starting a business isn't an easy process in the first place," says Doug Wilder, president and head coach of Wilder Business Success Inc., a coaching firm in Jacksonville, Fla. "When you couple with that the emotional trials that go into a marriage and the business, you have a recipe for danger."<br />
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Family problems can worsen if the entrepreneur spends every waking moment on building the new venture. "When one spouse is putting 16 to 18 hours a day into the business and the other spouse is working to keep money coming in, the big pitfall is family life," says John Keener, president of Kelsey Group Inc., a business advisory and coaching company in St. Louis. "They don't have a lot of time together, and if they don't have much cash, the pressure on the breadwinner is strong."<br />
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Here are suggestions from business owners, spouses and experts on how couples can cope with financial concerns that may arise:<br />
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* Make a plan and talk it over. Having a plan that both partners can discuss and agree to is crucial because it helps ease uncertainties and pressures later on. The plan should include nonfinancial success milestones, such as the number of new customers or needed certifications, as well as financial ones, Mr. Wilder says.<br />
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That way, when the business isn't making money, partners can discuss the activities the entrepreneur has completed that will help generate revenue, he says. "You need to get away from looking at success as dollars and see it as activities that are required to bring in dollars eventually," he says. "This helps when the entrepreneur comes home and says no money came in today and the other one asks, 'Well, were you working?' "<br />
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Dylan Ross didn't expect to make money immediately when he started Swan Financial Planning, a financial advisory firm, in December 2005. With no money coming in initially, having a business plan that showed concrete success milestones was critical, says Mr. Ross, 32.<br />
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He and his wife, Helen, worked on the plan for about a year before they were satisfied. It was especially important for Helen to sign off on it because, as an operations vice president at Merrill Lynch & Co., she would be the family's primary breadwinner.<br />
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"We talked about how long it would take before I would generate income and the sacrifices we would or might have to make during this time," says Mr. Ross, who has an office in Princeton, N.J. "It was a year of talking about this and that."<br />
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To complicate matters, the couple was expecting twins when Mr. Ross started his business. The babies were due six months later, and he wanted to be available to help. So, the plan for the business was based on his working no more than 40 hours weekly. "Working harder might build the business faster," he says, "but we would be stressed."<br />
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Mr. Ross says they have continued to modify their plan to meet continuing and developing needs and are happy with the progress of the business so far.<br />
* Set limits on financial and time investments. For many couples, establishing how much to invest in a new venture is smart, says Mr. Wilder. The spending limit sometimes is coupled with a timetable showing how long the entrepreneur has to devote to the new venture.<br />
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"They should decide on the limits for the cash outflow of the business and how long they should try," Mr. Wilder says. "That way, when things get tough, the entrepreneur can say, 'We agreed I would have this much more time.' "<br />
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The Woodingses limited their initial investment to $12,000 in savings, which they have since replenished. They also decided to give Mr. Wilder nine months to devote to the venture. "We knew that if the business wasn't making money by the end of 2006, that would be the end," Mr. Woodings says.<br />
* Line up other sources of income in case of emergencies. The working partner may be able to cover monthly expenses, such as food and housing. But when the roof must be replaced or the car needs repairs, it can play havoc on the family's financial equilibrium.<br />
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"Be prepared to be creative with finances," says Jill Levinson, director of marketing for Communispace Corp., a marketing strategy firm in Watertown, Mass. After her husband, Rob, 45, hung out his shingle as a marketing consultant in Boston five years ago, the family experienced so many financial highs and lows, "we were manic-depressive," Ms. Levinson says.<br />
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To make ends meet, they sometimes turned to family members for short-term loans. Even their dentist allowed them to delay payments, she says. The couple repaid every loan, and now Mr. Levinson, 45, earns more from his company, Brand Blueprint LLC, than he did as an executive.<br />
* Don't bring a spouse onboard immediately. By working full time, spouses usually provide the family's medical insurance and other important benefits. Not having to buy these is a significant advantage for fledgling entrepreneurs, who don't have the cash flow to afford benefits large companies provide.<br />
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"Small businesses get hammered on health care," says Kelsey Group's Mr. Keener. "With the spouse working, this is one thing they don't have to absorb."<br />
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But as small businesses grow and new employees are needed, some couples believe it makes sense to put the working spouse on the payroll, he says. This requires the business to shell out needed cash for medical insurance and puts both partners at risk if it fails.<br />
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"They have a tendency to hire the breadwinner in the family, so now they have all their eggs in one basket," Mr. Keener says. "If the company doesn't make it, they are lost completely."<br />
* Take turns being the entrepreneur. It isn't wise for both partners to be independent entrepreneurs in the beginning because their earnings can be unstable.<br />
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"One may have to put his or her dream on hold for a while," says Mr. Wilder. "They may say, 'I'll let you do this for a while and in X years, I get a turn.' "<br />
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One reason the Levinsons were financially stressed when Mr. Levinson started his company was that his wife was also an independent consultant at the time. It was "nerve-racking" for both partners to receive income sporadically, Ms. Levinson says. When both had paying clients and checks arrived regularly, life was good. But when both were pitching business and had no receivables, tensions would grow.<br />
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"It's difficult for a single consultant," she says. "But when two people were doing it, the difficulties were exponential." Communispace was one of her clients, and when it offered her a full-time job in 2005, she accepted. She now provides the family's health benefits, saving the couple about $1,100 monthly.<br />
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Mr. Ross says his flexible schedule is attractive to his wife, and the couple has discussed ways she may be able to work independently if the business is successful.<br />
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"Once I left a paying job with benefits," he says, "it took away the option for her to do that, at least until I'm established." (Source :<a href="http://finance.yahoo.com/loans/article/102947/Start-Ups-and-Spouses;_ylt=Asw7UI97MKbuy7zLZBk7z.tJ0tIF;_ylu=X3oDMTE4ZGVlaTh2BHBvcwMyMgRzZWMDYXJ0aWNsZUluZGV4BHNsawNzdGFydHVwc2FuZHM-"> yahoo Finance</a>)Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-53792913274938410782011-07-26T00:37:00.000-07:002011-07-26T00:37:15.261-07:00Making the Most of Online Matchmaking for Small FirmsWil Schroter has started nine companies -- some successful, others not. Over the years, the entrepreneur has developed a network of investors, software developers and others who might be able to help out with his businesses. He says friends and acquaintances began to come to him on a regular basis, asking him to put them in touch with advisers or job candidates he knows.<br />
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"It dawned on me that there was no central Rolodex where anyone who's looking to start a company could come for information," says Mr. Schroter, 32.<br />
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Go Big Network LLC was born from that realization. The Web site, www.gobignetwork.com, launched in early 2006, is structured like a dating site for start-ups, where entrepreneurs can create profiles and post ads looking for investors and others to help start their businesses. Posting a profile is free, but users pay a subscription – an average of $49 a month -- to contact someone on the site, says Mr. Schroter, who is based in Columbus, Ohio.<br />
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Several lender-borrower matchmaking sites have popped up in recent months. Like Go Big, RaiseCapital.com and FundingUniverse.com are designed for small companies seeking a cash infusion. Prosper.com focuses on individuals looking for money. WSJ.com talked with Mr. Schroter about what works and what doesn't for business owners using his service and how he funded his start-ups.<br />
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WSJ: Paint a picture of the typical investor on gobignetwork.com.<br />
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Mr. Schroter: The average investor on the site is a wealthy individual. They probably have as much investment capital as an angel investor, but our investor is more likely someone who has a full-time job, but also wants to place an investment in a start-up or film or what have you.<br />
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WSJ: There are 10,000 active listings on the site, and it seems most are companies looking for funding. What's the best way to stand out?<br />
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Mr. Schroter: There are 99 companies looking for funding for every investor. The best postings are short ads that are really to the point. Four sentences that are well-composed will beat four paragraphs every time. It should say: "This is the industry we're serving. This is the problem we're solving. And this is how we make money doing it."<br />
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A bad posting doesn't give any indication to the investor why they would want to invest in that company. It's: "We want to create a great company. We need more money. Invest in us." Instead, they should say: "We're going to be in the health-care industry. We found a cure for cancer. We're going to sell cancer pills for a dollar and make 90 cents on each one." An investor gets that.<br />
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WSJ: How often do companies find funding through the site?<br />
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Mr. Schroter: We don't have a way to track that. But when the average person posts, they receive three responses. There are 10,000 active listings – including people looking for funding and people looking to fund. People need to be in it for the long haul. You're not shopping for a mortgage – you're talking about a highly-specific fit.<br />
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WSJ: How did you fund your first business?<br />
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Mr. Schroter: I was 19. I talked to a couple of venture-capital companies and they laughed at me -- my projections didn't go past one year, and I had left things out like the cost of health benefits for employees. After three years, I had about $100,000 in debt -- a combination of credit cards and personal loans.<br />
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WSJ: How did you fund your most recent company, Go Big?<br />
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Mr. Schroter: Over time, I realized that sometimes you don't really need to raise money, but to convince people to do things for you, like build a Web site. I launched Go Big with less than $50,000. I brought together lots of people who were willing to participate [in exchange for] for stock. I employ 12 people, and they all have options in the company.<br />
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People should also pitch everyone all the time. I was in San Francisco last week, and every single person I ran into, I pitched my business. You never know, they might say, "Oh, my best friend happens to be a Java programmer." (Source : <a href="http://finance.yahoo.com/loans/article/103449/Making-the-Most-of-Online-Matchmaking-for-Small-Firms;_ylt=Ag6yOKPW8mO0BxdjMyv6VstJ0tIF;_ylu=X3oDMTE4YWJscDA1BHBvcwMyMwRzZWMDYXJ0aWNsZUluZGV4BHNsawNlbnRyZXByZW5ldXI-">Yahoo finance</a>)Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1910718406425160326.post-58246712079557552462011-07-25T04:25:00.000-07:002011-07-25T04:25:40.230-07:00The Dangers of Cosigning a LoanRecently I was asked by a family member to cosign a loan to consolidate her out-of-control debt. It wasn't the first time a family member has asked me for a financial favor, and it probably won't be the last. I refused. It wasn't easy -- turning down requests from the people I love is never easy -- but I knew it was the right thing to do.<br />
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There are good reasons that friends and family members agree to cosign loans: A parent wants to help out a child by establishing a credit history; an older brother wants to help a younger sibling buy his first car; a friend hopes to give someone a leg up after a divorce.<br />
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But cosigning a loan can be a huge financial blunder. If I cosign a loan, I'm agreeing to guarantee the debt -- and if the borrower can't make the payments, the lender is going to come after me and my assets. After the borrower stops making payments, the cosigner may be required to pay the loan's outstanding balance and accumulated interest, along with any late fees, collection-agency costs, and attorney fees incurred by the lender. The lender would have the right to sue me, file a lien against my home and even garnish my wages if I were unable to repay the loan. Generally lenders are allowed to attempt to recover the debt from the cosigner first, without contacting the borrower, though some states prohibit this practice.<br />
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How likely is it that I'd be asked to repay the loan? According to the Federal Trade Commission, some studies show that of cosigned loans that go into default, three out of four cosigners are asked to repay the loan.<br />
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Finding myself responsible for a cosigned loan in default can damage my finances in other ways. Late payments or, in a worst-case scenario, a court judgment would be reflected in my credit report, as well as the borrower's. That would damage my credit score, which would have a ripple effect through my financial life. In addition to disqualifying me from the best financing deals, a bad credit score could boost the amount of money I pay on auto and homeowners insurance. (Insurers base premiums in part on your credit history.)<br />
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My husband Gerry could also suffer. The damage to my credit score would likely lead to higher finance charges if we applied for credit on a joint account. We don't live in a community-property state, in which all debt obtained during a marriage is considered joint debt. (The nine community-property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If we did live in one of those states, lenders could go after Gerry to repay a loan I cosigned during our marriage if the borrower and I were unable to pay.)<br />
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Cosigning a loan could also limit the amount of money we'd be allowed to borrow -- lenders consider that cosigned debt mine, regardless of the primary borrower. We could be refused for credit if lenders determined we jointly have too much credit.<br />
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Parents often make the mistake of cosigning credit cards for their children thinking it will give them a leg up in establishing good credit. Cosigning a credit card is even riskier than cosigning a loan because parents have little control over how much additional credit the card issuer will extend to the child over time. While their hearts are in the right place, parents often end up doing damage to both their children's and their own credit scores because they don't properly educate their children on the dangers of missing payments.<br />
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Parents who are trying to help their kids establish good credit should note that credit-scoring company Fair Isaac is changing its scoring formula: A consumer added as an authorized user on someone else's credit card will no longer be able to benefit from the primary cardholder's credit history.<br />
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Saying I wouldn't cosign my family member's loan was tougher for me than other requests I've received for financial favors from my family members. This person has always confided in me and sought my advice on family matters and relationships, and I felt a strong urge to be supportive.<br />
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I fleetingly considered simply loaning her the money, but Gerry would never agree to it. Gerry's offended when family members ask for financial favors -- he feels strongly that people need to fix their own financial mistakes. "You never asked for help when you were neck-deep in debt," he pointed out the last time a family member asked to borrow money. "Digging yourself out taught you how to manage money." And though Gerry denies it, I'm sure it grates on him that the only family members who ever ask us for financial help are mine.<br />
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Unfortunately, my own family history has proven time and again that a financial agreement between loved ones usually ends up damaging the relationship, along with the parties' finances. It's also been my experience that granting one financial favor leads to requests for more -- with resentment on both sides. In addition to all the potential financial pitfalls of cosigning a loan, I could be risking the family bonds I cherish.<br />
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To soften my refusing to cosign my family member's loan, I offered to look at her overall financial picture with an eye toward freeing up cash flow and finding other sources of income to help make ends meet. I also volunteered to help her negotiate with creditors to obtain more-manageable terms on her debts. Lenders are sometimes willing to temporarily change the terms -- forgoing a few month's payments or lowering the minimum monthly payment due -- in times of financial hardship. (This is particularly true now of mortgage companies, which are reeling from a record number of foreclosures.)<br />
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I also offered to help her use financial-planning software to track her spending to find areas where she can cut back. Finally, I suggested ways she could generate more income. Though she works for a large company, her back-office skills are equally necessary for smaller businesses. Why not take on a second job on nights and weekends until the debt load becomes more manageable?<br />
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She thanked me, but politely refused my help. I still feel a twinge of guilt for not cosigning the loan -- I remember well how hard it was to extricate myself from my own financial jam. But in overcoming those difficulties, I learned how to better manage money. I hope that she'll find a way to pull herself out of debt and do the same. (source : <a href="http://finance.yahoo.com/loans/article/103332/The-Dangers-of-Cosigning-a-Loan;_ylt=AsxCpUVdg_hpn15Qo7rm.IxJ0tIF;_ylu=X3oDMTE4dTVlYnN0BHBvcwMyNARzZWMDYXJ0aWNsZUluZGV4BHNsawN0aGVkYW5nZXJzb2Y-">Yahoo finance</a> )Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1910718406425160326.post-559556113137383492011-07-25T04:22:00.000-07:002011-07-25T04:22:23.507-07:00Fund manager focus: Amundi tops the multi-asset strategistsMulti-asset strategies, by their nature, offer a broad spread of returns, but the manager that has come top of the performance tables over the three years to March, with two funds, is Paris-based Amundi Asset Management.<br />
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<a name='more'></a>The Amundi Capital VaR 20 fund came top with a total return of 28.6% by applying leverage to the process used by Amundi Fund Absolute VaR 4, which came second with 17.9%. The performance was impressive, despite the funds’ disappointing returns over one year, when Amundi Capital lost 4.4% and Amundi Fund lost 2.6%, both apprearing near the bottom of the tables. Delaware Investments' dividend income fund is named as the next best over three years by data provider Camradata with 14.7%.<br />
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The basic Amundi Capital VaR 4 fund derives its number from a target not to suffer a fall in value greater than 4% in normal market conditions. The target maximum loss of 20% for the Amundi Capital fund reflects its higher leverage: the manager declines to discuss this product, which has characteristics in common with hedge funds because it is marketed outside the Ucits umbrella. <br />
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Merrick Styles, Amundi’s head of absolute return in London, said the products derive two thirds of their performance from the top down views of seven architects, including him, who seek to put together views on short and longer term opportunities. The other third is derived from the performance of three overlay funds investing in opportunities in emerging markets, commodities and volatility. <br />
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The volatility fund is led by Fabio Castaldi and Alexandre Burgues adds an unusual twist to the Amundi fund, seeking to use investments in instruments such as variance swaps and out-of-the-money options to place bets ahead of market turbulence. Amundi is well known for its volatility strategies, currently managing €6bn. <br />
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Styles said that Amundi’s funds outperformed in 2009 and 2010 thanks to its bets on market recovery: “As markets deteriorated in 2008 we raised our bets in credit, equities and other instruments, and they came good in 2009.”<br />
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Over the last few months, the strategy has run out of puff. But Styles sees prospects for a limited recovery in poorer quality credit as well as equities. It is negative on the Swiss franc and the Japanese yen, but positive on the dollar. (source : <a href="http://www.efinancialnews.com/story/2011-07-25/amundi-has-topped-the-performance-tables">link</a>)Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-10785766270338013722011-07-09T23:13:00.000-07:002011-07-09T23:13:25.202-07:00How to Turn Your Vacation Into a Tax DeductionVacation budgets are down, and IRS audits are up. But that doesn't mean combining a family vacation with business travel is a bad idea -- just that you have to be careful and do it right.<br />
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One option for reducing your travel budget, especially if you travel for work, is to let Uncle Sam pick up part of the tab by deducting part or all of your trip. Since some travel costs can be deducted as business expenses, there's nothing wrong with writing them off: It's why many professional organizations host their annual conferences at tourist hotspots.<br />
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You may be able to write off the cost of a trip to look for work, too.<br />
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Here are the rules you need to know:<br />
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Deductible travel while looking for work<br />
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For those who don't travel for work, you might be able to deduct the cost of travel if you're looking for work, even if you don't land the job. But the primary purpose of the trip must be to look for work, and it has to be the same line of work you're currently doing. Here's how the IRS puts it:<br />
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"You may deduct travel expenses, including meals and lodging, you had in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you are unemployed and there is a substantial break between the time of your past work and looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work."<br />
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Deductible business expenses when combining personal and business travel<br />
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The rules for travel-related tax deductions are complicated. If you want to avoid a trip to Audit City, check these tips along with your baggage:<br />
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1. Getting there. If the trip is primarily for business and within the U.S., the cost of your transportation is fully deductible both ways. If it's international, the trip has to be at least 75 percent business in order to write off your plane ticket. (Less than that and you can only deduct the percentage related to business.)<br />
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2. Cruises have special rules. To be deductible, a business-related cruise has to be aboard a ship registered in the U.S. and avoiding foreign ports. You can only deduct up to $2,000 a year regardless of the length or frequency of travel, and you have to file a detailed written statement with the tax return.<br />
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3. Overstay is OK but not covered. You don't have to work all day, party all night, and leave when your business is done. A few extra days on either end of the business purpose won't disqualify you for deductions. Just make sure the primary purpose of the trip is business, you have documentation, and you don't deduct any expenses related to the recreational part.<br />
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4. Fitting in the family. You can't deduct expenses for anyone who isn't involved in the business of the trip -- so unless they're employees, the trick is to find overlap with what you would have to pay for yourself anyway. For instance, if you drive everyone in one car (yours or a rental), your deductible transportation got the entire family to the destination. And if everyone shares a single hotel room, it's deductible too. Any fees for added occupants or an upgrade to a larger room to accommodate the family, however, aren't covered.<br />
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5. Eat out at half price. While on deductible business trips, your meals and those of your business associates are deductible at 50 cents on the dollar.<br />
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6. Fixing other fees. Any kind of travel tends to rack up several incidental costs -- taxi fares, Internet access fees, phone calls, tips, laundry charges. If these are in any way business-related, you can write them off -- including seminar and conference fees. <br />
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7. Track everything. This is an area of the law rife with abuse. Which means increased odds of the IRS asking you to justify your deductions. So if you travel for business, keep meticulous records: not just receipts, but anything that helps prove your business purpose -- itineraries, agendas, programs, and the like.<br />
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8. Be reasonable. The IRS can call foul on extravagant expenses. So, unless it's typical in your business, don't rent a Rolls or take a penthouse at the Ritz. Expenses should be "reasonable based on the facts and circumstances."<br />
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Bottom line? If you like the idea of budget travel, learn what's tax deductible and let tax savings pay for part of the trip. While this is an area that can invite scrutiny, don't ever shy away from taking deductions you're entitled to. But don't be careless: Don't claim a vacation was a "business trip" just because you kept up with work emails or popped into a branch office in Orlando on the way to Disney.(finance.yahoo.com)Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-1910718406425160326.post-1392318033254926252011-07-09T23:11:00.000-07:002011-07-09T23:11:01.781-07:00More Room to RallyThe trading pattern that has dominated the markets for the past year could be breaking down—and that could spell opportunity for investors. <br />
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After a disappointing payrolls report on Friday morning, investors poured out of stocks and into the safety of bonds, a continuation of the "risk-on, risk-off" pattern that has come to characterize the post-financial-crisis markets. Depending on the economic news, the theory goes, investors either love stocks or hate them—even, seemingly, in the same week.<br />
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But while Friday appeared to be a classic "risk-off" day—the Dow dropped 62.29 points, or 0.5%—there are signs that the broader pattern of stocks moving in lockstep is beginning to wane, and that fundamentals are reasserting themselves. <br />
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Consider the most recent slide in the Standard & Poor's 500-stock index, which lasted from April 29 through June 15. That slump saw stocks drop for six weeks in a row—the longest rout since 2008—and seven out of eight. The 7.2% decline was the eighth of at least 5% since the market bottomed on March 9, 2009. That is the most such drops in the first 28 months of a bull market since the 1930s, according to InvesTech Research in Whitefish, Mont.<br />
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But the recent selloff was most notable for its gentleness. Despite a flare-up of Greece's debt crisis, a slowing U.S. economy and signs of a possible housing bubble in China, the S&P fell by an average of just 0.23% a day during the slump, the least of any of the eight recent dips. Meanwhile, the Chicago Board Options Exchange Volatility Index, known as the fear gauge, peaked at 22.7, only slightly higher than its 20-year average of 20.2. By contrast, the VIX topped 80 in 2008, and surged to 45.8 last year. <br />
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The VIX reflects the cost of buying options to protect a portfolio. Its modest rise indicates investors are less inclined to buy options as insurance against a drop in the market. "People saw how the market snapped back in 2010," says Kevin Kearns, senior derivative strategist at Loomis, Sayles & Co. in Boston. "They aren't willing to pay a significant amount for protection."<br />
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Likewise, "correlation," or the propensity of individual stocks to trade in lockstep with the S&P 500, rose no higher than 0.61 during the latest rout, much lower than the 0.81 registered in July 2010. (A correlation of 1.0 means that stocks move in perfect synch; a reading of minus-1.0 means they move in perfect opposition.) Correlations rise during selloffs as investors throw out the good with the bad. Lower correlations mean there is less fear. "After the seven previous drops, investors have become less susceptible to panic selling," says InvesTech Research President Jim Stack. <br />
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The lower correlations have meant that, unlike the 2010 swoon, some sectors have held up well this time. Investors could have made money by avoiding financials and energy, which lost 4.6% and 5.9%, respectively, and buying health care, utilities and staples, each of which returned more than 5%. <br />
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Professionals, in particular, appear less prone to selling pressures. While the percentage of bears outnumbered bulls by a 2-to-1 margin in the July 9 American Association of Individual Investors survey, there were nearly 50% more bulls than bears among advisers, according to the Investors Intelligence survey. In 2010, both showed investor sentiment plunging. <br />
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The difference in sentiment also was reflected in their trading. Retail investors withdrew about $26.7 billion from U.S. equity mutual funds in May and June, according to data from trade group Investment Company Institute, only slightly less than during the same period in 2010. Hedge funds and other professionals, meanwhile, cut their "short positions," or bets against the S&P 500, by 96% during the week of June 21. <br />
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"The shorts are getting out at the first sign of optimism," says Barry Ritholtz, director of equity research at FusionIQ in New York. "That's contributing to shallower drops."<br />
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Still, that doesn't mean investors should load up on risk now. Lower-quality stocks have been the best performers since March 2009, but the market appears to have begun favoring high-quality stocks, according to Greg Swenson, a senior analyst at Leuthold Group LLC. High-quality companies, defined as those with low leverage and stable profitability, gained 2.5% in the second quarter, compared with a 1.5% loss for low-quality stocks. <br />
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"You don't have to have a correction for high quality to outperform," Mr. Swenson says.<br />
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When should you dump stocks? Mr. Stack of InvesTech is watching the ISM manufacturing survey for a drop below 50, and is tracking the economically sensitive Dow Transportation Index, among others. <br />
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But with the June ISM rising to 55.3 and the Dow Transports closing at a record high on July 7, Mr. Stack is leaving his equity allocation above 90%, where it has been since May 2009. "It's best to give this bull market the benefit of the doubt," he says.(finance.yahoo.com)Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1910718406425160326.post-69047335933523826142011-06-13T04:34:00.000-07:002011-06-13T04:39:08.885-07:00Richest Americans Get $1.4 Million Tax Cut in Pawlenty PlanThe top 0.1 percent of U.S. taxpayers would save an average of $1.4 million in taxes under the economic plan of Republican presidential candidate Tim Pawlenty, according to an independent analysis. <br />
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Pawlenty’s $11.6 trillion tax-cut plan, which reduces rates on income, capital gains, interest, estates and dividends, is almost three times larger than the proposals endorsed by House Republicans.<br />
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Compared with current tax policy, 63.6 percent of U.S. households would receive a tax cut, with most of the remainder experiencing no change. Almost half of the benefits would flow to taxpayers in the top 1 percent of income distribution, or those earning more than $593,011 in 2013. <br />
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“It’s heavily weighted toward benefits for the wealthy, giving big tax cuts for the wealthy, and it makes the tax system much less progressive,” said Roberton Williams, a senior fellow at the Tax Policy Center in Washington, which conducted the analysis and released it today. The center is a joint venture of the Urban Institute and the Brookings Institution. <br />
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In a June 7 speech, Pawlenty called for cutting the top individual tax rate to 25 percent from 35 percent and reducing the top corporate rate to 15 percent from 25 percent. He proposed eliminating taxes on capital gains, dividends, interest and estates and allowing “small businesses” that currently pay taxes at individual rates to pay at the corporate rate.<br />
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<b>Cuts for ‘Everybody’</b> <br />
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“We reduce taxes for everybody,” Pawlenty spokesman Alex Conant said in an interview today in response to the distributional analysis. “The goal here is to create jobs and grow the economy, and to do that, we needed to reduce taxes on people who were entrepreneurs, small business owners.” <br />
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Pawlenty’s plan would eliminate corporate tax breaks and retain all individual tax breaks. Pawlenty would expand the 10 percent income tax bracket to cover the first $50,000 of income for individuals and the first $100,000 for married couples. <br />
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Compared with fully extending all the tax cuts enacted under President George W. Bush, Pawlenty’s plan would cost the government $7.6 trillion in revenue over the next decade, according to the study. Compared with current law, under which the tax cuts will expire at the end of 2012, Pawlenty’s plan would cost the Treasury $11.6 trillion in foregone revenue, the study found. The campaign estimates the revenue loss at $2 trillion amid the 5 percent annual economic growth Pawlenty is seeking.<br />
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<b>Federal Revenue</b> <br />
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The proposed tax cuts in Pawlenty’s plan are much larger than those proposed by House Budget Chairman Paul Ryan of Wisconsin and House Ways and Means Chairman Dave Camp of Michigan, both Republicans. They both want to keep federal revenue at the same level it would reach if Congress extended the expiring tax cuts indefinitely. Ryan and Camp have supported top corporate and individual rates of 25 percent, paired with cuts in tax breaks. <br />
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The study is imprecise because the researchers made some assumptions that might not match Pawlenty’s proposal. For example, the analysis assumes that Pawlenty’s plan would eliminate the alternative minimum tax. Conant said he would reduce AMT rates and index the exemption, causing fewer taxpayers to be affected by it than under current law. <br />
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Pawlenty, the 50-year-old former governor of Minnesota, said 5 percent annual average economic growth would help make up the revenue gap. Conant said such growth would be driven by the tax plan as well as by spending cuts, regulatory overhaul and monetary policy changes that Pawlenty is proposing. <br />
‘No Silver Bullet’ <br />
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“Some of our critics are looking at just one segment of it in isolation, and that’s sort of missing the point,” Conant said. “There’s no silver bullet to our economy. You need a comprehensive plan. That’s what we’re offering.” <br />
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Hitting the 5 percent growth target won’t be easy. The U.S. economy hasn’t expanded by 5 percent in a single year since 1984. <br />
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“If that 5 percent becomes 4, 3, 2 or 1 percent, we’re in deep doo-doo,” Pawlenty said during a question-and-answer session after the June 7 speech. “So this isn’t about whether some people are going to get wealthier or not. It’s about what are those things that we need to do to make it more likely, not less likely, that businesses are going to start, grow, add employees, buy capital equipment, build buildings, conduct research and do all the things it takes to keep a private economy going.” <br />
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Conant declined to identify the economists who are advising Pawlenty. The campaign plans to introduce its policy team in the coming weeks, he said.<br />
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Source : <a href="http://www.bloomberg.com/news/2011-06-10/pawlenty-to-give-richest-a-1-4-million-tax-cut.html">http://www.bloomberg.com/news/2011-06-10/pawlenty-to-give-richest-a-1-4-million-tax-cut.html</a>Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-1910718406425160326.post-31683609916377739812011-06-01T00:27:00.001-07:002011-06-01T00:27:41.635-07:00Low Interest ConsolidationThe story isn't that unusual. It's one that is found every day throughout the country. The monthly bills come in and the amount owed is exceeding the amount of income that is available to pay the bills.<br />
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<a name='more'></a>How did it happen? Simply put, over time the debt kept adding up while the income stayed about the same. One new credit card after another was offered, accepted and approved. A new car or home then was added into the mix. And for awhile, all looked good and was staying afloat. Then there was one missed payment, or one too many purchases or one of the credit companies jumped the interest rates into 20% or more and that tipped everything over. The question now becomes what are the options and what can be done to resolve this situation.<br />
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One of the first and best options is to look into low interest rate consolidation of your debt. Basically, debt consolidation is where you find ways to lower the interest rate on the debt you owe to a level that you can pay. There are several ways that this can be done:<br />
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Personally negotiate with your lenders for lower interest rates or by extending the terms of the payments. This will enable you to lower the overall payment to an affordable level.<br />
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Take out a home equity loan to consolidate all of the payments into one smaller and cheaper payment by using your home as collateral. If you are current on your payments and have sufficient equity in your home, this might be a viable option. However, make sure that you throw the credit cards out so this isn't done again in the future. Also, statistics show that in 2 years many homeowners that have used this option actually are in debt for the same amount of more by continually accessing the line of credit. Remember, this is not simply another way to increase your debt.<br />
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Refinance your car. Many of us don't think of this as an option. But your car or cars is an asset that can be used as collateral. While it may not be enough to cover everything, it is a place to begin to look for lower interest rate debt consolidation.<br />
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Talk with the National Foundation for Credit Counseling (NFCC). If you do not feel that you can negotiate with your credit companies yourself, this group can help you get it done. They will undertake the conversations for you. It is a non-profit group that gets paid by the creditors so they are paid once you have completed the negotiation process. This can be a win-win for both you and your credit companies.<br />
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Whichever one of these options you choose, or even if you choose a combination of several options, remember your end goal. It is to completely eliminate the stranglehold of debt from negatively impacting your life and your future. This isn't a simple stopgap for now, it needs to become a long term plan that is acted upon. And once you have effectively eliminated the debt with a low interest rate consolidation, you should not end up there again in the future.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-26258077643605781232011-06-01T00:24:00.001-07:002011-06-01T00:24:47.513-07:00Finding the Best Refinance Home Mortgage Loan OnlineWhere can a consumer find the best home mortgage loan refinancing rate? One of the most effective ways of landing the best refinance mortgage rate is by doing online research. The Internet has a wealth of resources when it comes to lending companies and agents that offer only the best loan products, schemes and services. And while it is true that banks and other financial institutions are where consumers commonly go to apply for mortgages, a great number of them can actually be very expensive in terms of the interests that go with the loan. This is why it is a must that before you even decide to negotiate with a prospective bank or lender, it would be very convenient for you to learn more about them online.<br />
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Prospective borrowers must realize that when they research on the Internet on as many mortgage lending companies as possible, this means gaining a wide variety of options. And with such great number of options made available, they are likely to eventually enjoy landing the best offer. Hence, if you are a potential borrower, it is a must that online research is done with a good amount of your time in order to gain desired results.<br />
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Indeed, investing your time to do ample research on where to get the best home mortgage refinance program can be productive action on your part. In fact, a lot of people who decide to do exhaustive research online are able to find the most lucrative mortgage refinance offers. Another thing about doing online research is that you are able to save substantial amount of money through this method. Think about the car gasoline that you will use for travel to the loan company's downtown office as well as other expenses that you will incur when you visit and talk personally to a loan officer. You are sure to spend a lot less if you decide just to spend your time in front of your laptop and do online research.<br />
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In fact, there are now numerous lenders and loan companies that maintain their own websites and are only too happy to interact with their clients, existing and prospective, online. Needless to say, even with a few clicks on your keyboard keys, you might even immediately land that amazing loan deal that you have been dreaming of. Just check the online method of refinancing your loan and more often than not, you will eventually find the best.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-53327197278217971322011-05-25T23:00:00.000-07:002011-05-25T23:00:16.220-07:00How to Get a Car Title Loan OnlineYour car is a very versatile asset that can do more than just provide you with a convenient mode of transportation. For example, if you own it outright and are no longer making monthly payments to a bank or credit union, then you can use the vehicle as collateral for online car title loans. This type of loan gives you access to instant cash, and as long as you make your payments on time, you can repeat the process whenever necessary. In short, your vehicle can serve as a much-needed financial safety net to help get you through any occasional rough patches you might encounter.<br />
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<a name='more'></a>Although the specific terms, rates, and conditions of title loans vary from lender to lender, they have many common characteristics. In most cases, you can borrow $1,000 or more for a period of 1-24 months by surrendering your vehicle's title and an extra set of keys to the lender. You retain physical possession of the vehicle and may continue driving it during the loan period. You must make monthly payments on each due date, and at the end of the period you will have to pay off the balance of the loan. Failure to do this could result in additional fees or penalties, or in some circumstances, having your vehicle seized.<br />
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The application process for online car title loans also varies depending on which lender you choose, but here are the general steps.<br />
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1. Find a reputable loan company.This is by far the most time-consuming step of the process-and the most important one, so don't even think about cutting corners. Using your favorite search engine, first come up with a list of potential lenders that you will research further. Then run additional searches to verify that the companies are legitimate (not scams), fair, and reputable, and that past customers haven't experienced serious problems while trying to get their title loans.<br />
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2. Compare loan terms and rates. Not all online car title loans come with the same terms or interest rates, so it pays to do a little comparison shopping. Also, make sure to check the lender's policy about early repayment. Repaying your loan early could save you a significant amount of money in interest fees, but some companies assess penalties for early repayment. Try to stick with one that doesn't.<br />
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3. Review the minimum requirements. Are there any liens against your automobile? Is the vehicle less than 10 years old and does it have a wholesale blue book value of at least $2,500? Are you at least 18 years old, currently employed, and able to provide verifying documents? These are often the absolute minimum requirements necessary to even be considered for title loans. While answering "yes" to all of these questions doesn't guarantee approval, answering "no" to any of them will result in immediate disqualification.<br />
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4. Submit an application. This can often be done electronically and/or via fax. Once your initial application is reviewed, the lender will make a decision about whether or not to proceed with the secondary application process. The secondary application process for title loans typically involves sending in copies of your driver's license, Social Security card, most recent paystub, proof of insurance, and any other documents the lender requires.<br />
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5. Receive your money.Upon final approval, which often comes within one or two business days, the loan amount will be transferred electronically to your bank account. You can then immediately access the money at your nearest branch or ATM.<br />
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This easy application process makes online car title loans a convenient way for you to get fast cash whenever you're faced with an emergency. They are particularly useful if you have bad credit or no credit, and as long as you make your payments on time, you can keep the interest charges to a relatively reasonable level. When you run out of other options, give this type of loan a try.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-1910718406425160326.post-43259318099737718342011-04-22T23:08:00.000-07:002011-04-22T23:08:44.211-07:00June, 2011 Tax CalendarThis Tax Calendar shows the due dates for filing tax returns and reporting tax information. Generally, if the due date falls on a Saturday, Sunday or legal holiday, the due date is the next business day. However, we recommend using the standard dates listed below to be on the safe side.<br />
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While these due dates are generally applicable, certain tax circumstances and specific situations may result in modification of these dates. Accordingly, if in doubt, you should verify the due date with your tax advisor.<br />
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<strong>June 10 </strong><br />
<ol><li>Employees - who work for tips. If you received $20 or more in tips during May, report them to your employer. You can use Form 4070. </li>
</ol><strong>June 15</strong> <br />
<ol><li>Individuals - If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 and pay any tax, interest, and penalties due. Otherwise, see April 15. If you want additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then file Form 1040 by October 17.However, if you are a participant in a combat zone you may be able to further extend the filing deadline.</li>
<li>Individuals - Make a payment of your 2011 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the second installment date for estimated tax in 2011. </li>
<li>Corporations - Deposit the second installment of estimated income tax for 2011. A worksheet, Form 1120-W, is available to help you estimate your tax for the year. </li>
<li>Employers - Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in May.</li>
<li>Employers - Social security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in May.<br />
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</ol>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-42389719152836303482011-04-16T02:52:00.000-07:002011-04-16T02:57:14.236-07:00May, 2011 Tax CalendarThis Tax Calendar shows the due dates for filing tax returns and reporting tax information. Generally, if the due date falls on a Saturday, Sunday or legal holiday, the due date is the next business day. However, we recommend using the standard dates listed below to be on the safe side.<br />
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While these due dates are generally applicable, certain tax circumstances and specific situations may result in modification of these dates. Accordingly, if in doubt, you should verify the due date with your tax advisor.<br />
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<strong>May 2 </strong><br />
<ol><li>Employers - Social Security, Medicare, and withheld income tax. File form 941 for the first quarter of 2011. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until May 10 to file the return.</li>
<li>Employers - Federal Unemployment Tax. Deposit the tax owed through March if more than $500.</li>
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<strong>May 10 </strong><br />
<ol><li><strong> </strong>Employers - Social Security, Medicare, and withheld income tax. File form 941 for the first quarter of 2011. This due date applies only if you deposited the tax for the quarter in full and on time. </li>
<li>Employees - who work for tips. If you received $20 or more in tips during April, report them to your employer. You can use Form 4070.</li>
</ol><strong>May 16 </strong><br />
<ol><li>Employers - Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in April.</li>
<li>Employers - Social security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in April.</li>
</ol>Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1910718406425160326.post-8309098934736761662011-03-15T20:36:00.001-07:002011-03-15T20:36:55.645-07:00Savings Accounts with High InterestIf your looking for a silver lining from the recent wave of rate rises the Australian RBA has made then you can find it in the increased saving account rates on offer. Some high interest saving accounts are offering over 7.0% interest.<br />
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With the rapid rise in online banking has brought increased competition to the savings account market over the past few years. Competition has really picked up in the market and some banks have offered to pay savings interest rates several points above the official RBA cash rate.<br />
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If you're planning to open a high interest savings account, here are some things you should watch for in the product brochures.<br />
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Savings Interest Rate: Note that the savings interest rate for high interest savings account is a variable rate, subject to change depending on RBA rate announcements. It is possible that the high savings interest rate offered in the brochure may apply only during a limited introductory period. After the specified period, the savings interest rate will revert to the normal rate. Check both the introductory rate or bonus rate and the normal savings interest rate so you don't get any surprises.<br />
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Minimum deposits or balance required: Some high interest savings accounts are designed to induce you to save regularly but discourage withdrawals in order to build up the money in the account. To this end, you may have to make a minimum deposit every month (say, $50) but there is also a ceiling (say, $500). For other institutions, they may require that a minimum balance be kept in a linked transaction account (or regular savings account) for your high interest savings account to earn the offered high savings interest rate. Some banks require as much as $5000 as minimum balance in your transaction account before your high interest savings account starts to earn. Failure to keep the required minimum balance in the linked account will reduce the earnings potential in the high interest savings account.<br />
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Limits on withdrawals: One other condition that may be imposed is a restriction on withdrawals. Most of the competitive accounts don't have any restrictions or penalties on withdrawals. However there are some institutions with penalties such as no interest payable during the months in which a withdrawal is made. Make sure you understand the conditions before you apply.<br />
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Fund Transfer Interval: If the online high interest savings account and its linked transaction account are maintained in the same bank, you will have no problem with fund transfers, as these will be done immediately. However, if you have different banks for each one, you will have to plan ahead. It may take as little as 2 days before your online high interest savings account gets credited for the transfer.<br />
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If your volume of transactions is minimal and you want to earn more on your savings account, you may not like the required link to a transaction account, with its monthly keeping fees and minimum balances. You could consider opening an internet savings account. There are a number of these on offer.<br />
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Before you apply for a high interest savings account make sure you are happy and understand the fine print and features on offer. The effort will help you find the products that gives you high savings interest rate plus the conditions that fits your needs best.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-1910718406425160326.post-524990221006184862011-03-15T20:34:00.001-07:002011-03-15T20:34:43.901-07:00Adverse Credit Remortgage: Refinance at Better TermsGetting a remortgage with adverse credit is a daunting task and it is increasingly becoming a widespread problem in UK. An adverse credit remortgage is a type of mortgage, which is particularly used by people who have adverse remarks in their credit history.<br />
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Adverse credit ratings are rising as people are finding it difficult to repay the loans they took in order to remedy their financial exigencies. The credit ratings are remarks given by your previous creditors based on your repayment history. If you are punctual and prompt in repaying the installments they give you a positive remark and a negative rating incurs, if you miss their installments and are erratic in the repayment schedule.<br />
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Lenders are wary of this negative or adverse credit rating. They find it risky to lend any amount to such persons and reject their applications in most of the cases.<br />
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While, applying for an Adverse credit remortgage, the borrower has to face two kinds of situations. In the first case, although he has an adverse credit rating against him, he can offer something like a house or home equity as a collateral to the remortgage. In second case the borrower with the adverse credit history doesn't have anything to offer as collateral or the value of collateral is not adequate to guarantee the loan.<br />
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The lenders, if they find that they can get something as collateral for the remortgage offer, are prompt in lending as compared to a situation where they have to lend solely on the basis of creditworthiness of the borrower. The lenders are comfortable by the fact that if the borrower defaults in payments, they can repossess the collateral. Depending on the collateral and creditworthiness, lenders fix interest rates, lending amount and the repayment schedules.<br />
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Remortgaging involves changing the mortgage without changing the existing house or property. Adverse credit remortgage can be used for getting a better deal on mortgage from a different lender. It can also be used to get an improved deal on mortgage from the existing lender. Adverse credit remortgage may also be used to provide funds or to get a loan on the increased equity in home or property. They are very useful in consolidating existing debts from various sources into one single manageable loan. Emergency expenditures like the purchase of a car, a holiday, some reconstruction or medical bills can be funded by such remortgages.<br />
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Getting an adverse credit remortgage to finance these purchases is considered a wise option because remortgage offers lower interest rates and easy repayment options as compared to other methods of borrowing.<br />
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People with adverse credit should be very cautious while taking a remortgage. Mortgage lenders in UK are squeezing such people with higher interest rates and unreasonable terms and conditions.<br />
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Remortgaging involves many fees, which increase the cost of the process. There are early redemption penalties, re-appraisal of property, solicitor fees, office and conveyance charges, which have to be taken into consideration while taking an adverse credit remortgage. The fact that a borrower has an adverse credit rating makes the situation even worse for him. As the lending market in UK is very competitive the borrower is advised to shop around for lenders, which offer zero product fees, cashback, free basic property valuation and minimum fee for legal and other expenses. A good lender, who provides adverse credit remortgage will negotiate the best possible deal on prepayment penalties for its client. Finding such a lender is not easy but ultimately it will be worth the effort.<br />
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For most of us, if we have something to offer as collateral, getting an adverse credit remortgage will be quite easy. The new lender will ask for all the documents and complete the formalities. If everything goes smoothly, it won't take long to get an adverse credit remortgage.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1910718406425160326.post-484298154774747092011-03-13T07:59:00.001-07:002011-03-13T07:59:35.074-07:00Best Secured Loans RateWhen you are searching for a loan, you will want to begin by starting to compare rates. While the terms and conditions surrounding your loan are vital to finding the right loans, getting the best secured loans rate is important because it will determine how much you will pay each month and even how long it will take you to repay the entire amount of the loan. Lower rates mean that the loans cost less to you, in terms of the total amount you have to pay back, than those with higher rates.<br />
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When you want to find the best secured loans rate, you will need to start by deciding what you need. Normally, people want to purchase high value items, such as homes, vehicles, jewelry, electronics, and many other items. The rate will vary based on the item you are planning to obtain a loan for. For vehicles, you can often find an online tool, called a best secured loans calculator. This tool will help you review rates and find the best option available to you, as well as giving you an idea of the term of the loan, the cost each month to you, and any fees associated with it. Because the loan will be secured using the vehicle you purchase as collateral, the calculator will give you a rate based on how much the vehicle you plan to purchase will cost.<br />
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For those who plan to purchase a luxury item like jewelry or electronics, finding the best secured loans rate is more difficult than just asking the company where you plan to buy the item. You will want to compare secured loans rates at a number of lenders to ensure that the item you are purchasing is sold to you at the best available price and rate. You can compare by finding out what the company who you are buying the item from has to offer, and then searching for online lenders who offer the best rate. Often times, you will see an improvement in your credit score as you continue to make payments on your loan in a timely manner each month.<br />
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If you want to purchase a home, you will find that the best secured loans rate varies greatly depending on the loan program and lender you decide to work with. Since home loans are such an important purchase, you will want to speak to a number of lenders to find out who offers the best secured loans rate for home purchases or refinances. No matter which type of loan you plan to use, you will find out that spending the time to review secured loans rates at different companies can save you hundreds or even thousands of dollars over the course of your loan. Choosing the right secured loans rate will help you keep your payment down and pay off the loan quickly.<br />
To comprehend the mechanisms of a loan and all the different variables, you will need to grasp the fundamentals that define the different types of loans. Once you understand these mechanisms, you will easily be able to find cheap and best secured loans rate.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1910718406425160326.post-37333960827941081002011-03-09T00:55:00.001-08:002011-03-09T00:55:57.764-08:00Take Advantage Of A Secured Loan CalculatorGoing online to find the cheapest rates of interest and best deal when it comes to taking out a loan is one of the quickest ways of getting the best deal and a specialist website will make some of the best tools available to make the job of securing the cheapest rates of interest easy. One of the best tools is the online secured loan calculator, by using this tool you are able to search with the whole of the marketplace to make sure that you have to best loan possible.<br />
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Interest rates for secured loans vary greatly so the more quotes you can get before you decide which to take out the better chance you will have of getting the best deal possible with the lowest rates. An online secured loan calculator makes this task easy and quick and along with this you are able to get a vast amount of information regarding secured loans so that you are able to make the right choice when comparing quotes.<br />
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A secured loan allows you to borrow a much greater amount of money over a longer period of time than an unsecured, personal loan would, but you have to remember that the longer the term of the loan then the more interest will be added onto the cost of the borrowing. You also have to take into account this is a secured loan which means that you are going to be putting up your home as security against the amount you are going to borrow, the amount you are actually able to borrow will depend on how much equity you have in your home along with other factors. As you are using your home as equity and security then while you are repaying the loan your home is at risk of being repossessed if you cannot manage to keep up the repayments.<br />
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A secured loan calculator will help you to not only find the cheapest rates of interest and best loan but will also be able to help when it comes to deciding how long to take the loan out over and how much the monthly loan repayments will be. You will have to compromise against monthly low repayments and the length of the loan bearing in mind it will accumulate more interest over time.<br />
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Once you have got quotes using a secured loan calculator then you have to also compare the small print and key facts of the loans. However a specialist website should include these in with the quotes for the loan, it is essential that you do read these as this is where you can find additional costs which could be added onto the loan, examples of such costs include early repayment fees and payment protection. Payment protection insurance should not automatically be included in the cost of the quote but it has been known to happen, so check to make it hasn't. If you want peace of mind that payment protection can bring then you can buy it independently with a specialist provider much cheaper.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-16839965163214065892011-03-07T23:04:00.001-08:002011-03-07T23:04:35.763-08:00IRS Debunks Frivolous Tax ArgumentsThe Internal Revenue Service today released the 2011 version of its discussion and rebuttal of many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws.<br />
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Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 84-page document, The Truth About Frivolous Tax Arguments.<br />
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The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.<br />
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Congress in 2006 increased the amount of the penalty for frivolous tax returns from $500 to $5,000. The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.<br />
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The 2011 version of the IRS document includes numerous recently decided cases that continue to demonstrate that frivolous positions have no legitimacy.<br />
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Frivolous arguments include contentions that taxpayers can refuse to pay income taxes on religious or moral grounds by invoking the First Amendment; that the only “employees” subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable.<br />
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In addition, the document highlights cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes, and the imposition of criminal and civil penalties on taxpayers who claimed they were not citizens of the United States for federal income tax purposes.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-19086124752487035752011-03-07T21:26:00.001-08:002011-03-07T21:26:37.368-08:00How To Decide Whether Auto Title Loans Are Right For YouHaving an urgent need of money, and not having any resource to dip into is a common thing and this is where auto title loans come in. While there are times when the emergency can wait till the next paycheck, there are cases where it's a do-or-die situation. A cash loan for car title becomes indispensable at this point, since you get quick and easy access to cash, to take care of whatever financial need that you have. Basically, an car title loan dips into the equity you have in your car. Your car title is used as collateral, hence the subsequent naming of these kinds of loans.<br />
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The prerequisite to getting approved is having a car that you have fully paid off. As one would assume, the amount you are given will hardly reach the car's worth (its mostly 50% the market value). This is because the lenders cannot risk giving that much. Besides, it puts more pressure on the borrower to make the repayments, since they will have more to lose in the end. The most outstanding advantage is that you get money fast. The approval period is unbelievably short, and you are given money to take care of whatever need, you have. If you are sure of timely repayment, an auto title loan is a good idea. You don't get your credit checked, which in other words means that you can get approved so long as you own a car, and have a regular source of income.<br />
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Sadly, the bad that comes with auto title loans greatly surpasses the good. The repayment period is short, averaging a period of thirty days. At the end of the term, the borrower is expected to repay the amount in full, together with the interest earned. The rates themselves are severely unfriendly, ranging up to a few hundred points when calculated on an annual basis. If unable to repay your auto title loans, the car can be repossessed by the lender who fully obtains it as it was the collateral, or a rollover option is offered. The latter only postpones the problem, and adds penalties to the equation as well. If you are already immersed in debt, an auto title loan will simply be a fuel to the fire.<br />
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Regulations on auto title loans differ from one jurisdiction to the next, and it's good to be aware of the legal aspect of it, to know what your legally mandated rights are.<br />
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Sometimes, when there is no other option left, you may think of applying for auto title loans. While it is not a certainty that an auto title loan will come with huge interest rates, it is undoubtedly the norm. And this is why you should do some research prior to applying.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1910718406425160326.post-73447579552639857532011-02-28T10:44:00.001-08:002011-02-28T10:47:05.437-08:00Avoiding Income Tax AuditsA piece of IRS software called the Discriminant Inventory Function System analyzes tax returns for oddities and discrepancies. Based on a closely guarded formula, the system assigns each return a score that determines whether or not the IRS will audit you.<br />
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Here are some common red flags:<br />
significant income increase or decrease<br />
significant deduction-to-income ratio -- say, $80,000 in deductions on a $100,000 income<br />
business deductions consisting of fancy dinners and pricy trips to the Moulin Rouge<br />
home-office deductions<br />
low tip income for workers who traditionally make a lot of money from tips<br />
income exceeding significant benchmarks, such as $100,000 and $1,000,000<br />
self-employment<br />
computational mistakes and typos<br />
incorrect Social Security number<br />
incorrect reporting of income, deductions, et cetera.<br />
late filing without applying for an extension with Form 4868<br />
not paying your full tax liability without applying for an installment agreement with Form 9465<br />
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Obviously you can't avoid an income change if you get a better-paying job. And if you're self-employed, you're self-employed. But you can still do some things to decrease the likelihood you will be targeted for examination:<br />
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<strong>Keep Good Records</strong>: Three years is the statute of limitations on auditing returns that were filed on time. So, theoretically, the IRS could audit you for a return you filed three years ago. If you keep good records, you'll be able to answer any inquiries the IRS might have.<br />
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<strong>Explain Yourself: </strong>If your trip to the bowling alley is a justifiable business expense, include the receipts, a written explanation and any other appropriate documentation with your return. If you think the IRS might be curious, take care of it before they have a chance to ask you about it.<br />
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<strong>Just Because You Spent Money Doesn't Mean It's a Deduction:</strong> Don't go overboard with your deductions, especially if you're self-employed. Also, don't estimate your deductions -- use exact amounts based on receipts.<br />
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<strong>Beware of Tax Software:</strong> Tax software is great for returns at the simpler end of the spectrum. When you start getting into deductions and complex sources of income, consider verifying the accuracy of your return with a tax professional.<br />
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<strong>Compare: </strong>Compare your tax liability to the national average for your occupation. If there's a big difference between your tax liability and the rest of the country's, take another look at your return.<br />
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<strong>Be Tidy: </strong>A sloppy return is sure to get a thorough check by the IRS, especially if the all-important numbers are illegible.<br />
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<strong>Check and Recheck Your Return:</strong> Nip mathematical errors in the bud before you file.<br />
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There's no sure way to avoid an income tax audit. In fact, every year the IRS conducts a number of random audits to serve as benchmarks for its examinations. The best things you can do are file on time and pay what you owe. When it comes down to it, punctuality and accuracy are the only things the IRS really wants.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1910718406425160326.post-81127300678806090092011-02-28T10:41:00.000-08:002011-02-28T10:43:16.151-08:00Preparing for Income Tax AuditsHow do you prepare for an income tax audit? It depends on the type: correspondence, field or office.<br />
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<b>Correspondence Audit</b><br />
If the IRS examines one of your returns, the examination will likely take place via mail. The IRS uses correspondence audits to take care of the most common tax return problems, such as missing forms and schedules, illegible entries and mathematical errors.<br />
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Your first step is to return the audit notice along with any documentation and explanations the IRS has requested. Such documentation might include:<br />
home mortgage statements <br />
tax returns <br />
receipts <br />
brokerage statements <br />
retirement account records <br />
pay stubs <br />
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For example, if the IRS questions whether your business meal deductions are valid, you would include receipts from those meals, as well as any proof that these meals were, indeed, business related.<br />
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<b>Field Audit </b><br />
In a field audit, the examiner visits your home or business to verify the information on your tax return. For example, if you write off a massive amount of printer ink, a field examiner might want to know why you go through so much ink.<br />
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<b>Office Audit </b><br />
In an office audit, you go to an examiner's office. The examiner requires you or your representative -- such as your tax preparer or lawyer -- to bring documentation and information such as receipts, account statements or pay stubs.<br />
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At the end of the audit, the examiner will mail you or give you a 30-day letter. This letter consists of a copy of the examination report, an explanation of how the IRS wants to change your tax return to reflect the report's findings, an explanation of your right to appeal and a handy publication called "Your Appeal Rights and How To Prepare a Protest If You Don't Agree."<br />
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You have 30 days to respond, so if you're not sure about the IRS's findings and you want to consult a tax professional, don't rush to sign the examination report. If, within 30 days, you find the IRS is correct, indicate you agree and sign the examination report.<br />
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If you do not agree, however, you can appeal the findings before the 30 days is up. An appeal, handled by an IRS Appeals Officer, can take a year or longer.<br />
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Following the appeal, the IRS sends a 90-day letter, which gives you -- you guessed it -- 90 days to request an escalation to Tax Court, in case you don't agree with the Appeals Officer's findings. Most audits are resolved long before Tax Court comes into the picture.<br />
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But before you appeal the findings, it would be in your best interest to ensure that you are 100 percent right, because interest accrues on any unpaid tax from the day you file your return, not the date of your audit. For example, if the IRS audits you for a return you filed two years ago, and it turns out you are in the wrong, you owe the unpaid tax plus interest that has accrued over that two years plus late-payment penalties. As you might imagine, these combined factors can make for a nasty bill.Unknownnoreply@blogger.com1